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Netflix seems to be tired of people asking, “What is a Netflix show?”
In a letter to shareholders Wednesday, it attempted an answer. What it came up with is that a hit Netflix show is, well, a hit Netflix show. You know, like, “Beef, “Queen Charlotte,” “Love Is Blind” or “The Night Agent” — any show that “super-serves the audience,” as the company put it.
Tautologies aside, it might have a point. Viewers tuned in, and subscribers paid up, to the tune of 5.9 million net new additions in the June quarter. Whether that was because Netflix started cracking down on password sharing in earnest or because its popular shows were popular, Netflix has reached a critical mass that transcends tentpoles, franchises and familiar brands.
“Kids today watch Netflix and YouTube and don’t associate with one set of IP driving viewing,” Gerber Kawasaki CEO Ross Gerber told TheWrap. “This does give it an advantage.”
The streaming giant emphasized variety in its second-quarter earnings report, mentioning sequels to Chris Hemsworth’s “Extraction” and Adam Sandler’s “Murder Mystery,” dramas like “The Diplomat,” young adult series like “XO Kitty,” and everything from rap competitions to a Tour de France docuseries.
Netflix lacks an identity, in other words, asides from being a place you can go to stream things you want to watch. What if that’s less of a weakness than a strength?
Watching whatever’s on
Take a gander at any weekly Nielsen ratings report and you’ll see Netflix dominating the charts. In last week’s chart for June 12-18, eight of the top 10 most-watched streaming shows or movies are exclusively on Netflix or shared between Netflix and other services. The outliers are the kids’ show sensation “Bluey” on Disney+ and “Avatar: The Way of Water,” one of the biggest-grossing movies of all time and currently streaming on Disney+ and HBO Max.
Eight of the top 10 original shows are Netflix originals, with only Apple TV+’s buzzy sensation “Ted Lasso” and Paramount+’s “Star Trek: Strange New Worlds” placing in the top 10.
The company still boasts a market-beating 238 million subscribers, which it’s trying to better by converting password freeloaders to sign up or courting the price-sensitive with its still small but growing ad-supported plan. And what do those subscribers want to watch on Netflix? Whatever happens to be on Netflix.
The brand question
Chatter about Netflix possibly buying a major studio is usually defined by what IP might come with the deal. Nabbing Paramount, for example, would give them the likes of “Transformers,” “Mission: Impossible” and “Star Trek.” However, while landing those franchises might impress media pundits and please shareholders, to date, it hasn’t been an advantage Netflix seems to need. That’s a polar-opposite strategy to the brand- and franchise-heavy pitches services like Disney+ and Max are making.
Netflix’s biggest English-language shows were originals like “Stranger Things” or new-to-television adaptations like “Bridgerton” and “The Witcher.” Netflix can get top-tier viewership from star-driven original movies like Dwayne Johnson’s “Red Notice,” Ryan Reynolds’ “The Adam Project” and Sandra Bullock’s “The Unforgivable.” The Jenna Ortega-starring and Tim Burton-directed “Wednesday” was an exception, though it rebooted the “Addams Family” in live action after decades of dormancy.
Where Netflix tends to struggle is when it plays the same game as their more IP-driven rivals. The live-action adaptation of “Cowboy Bebop” was a disaster. “Resident Evil” lasted a single season. The $200 million “Jupiter’s Legacy,” an attempt to create its own MCU-style comic book superhero universe, was no more successful than Vin Diesel’s attempts to launch a Valiant cinematic universe with “Bloodshot.”
Playing a different game
What is Netflix’s identity amid a crowded streaming era? Well, it’s not about any single piece of content or ongoing franchise, even though any given subscriber surely has a favorite Netflix show or movie. Netflix is defined as being the first of its kind, arguably the only A-level streaming service, one that got into the marketplace of online streaming by choice rather than competitive envy or Wall Street pressure.
“[Netflix] has some significant advantages over the competition, including the fact that it is exclusively a digital streaming company,” stated Dan Goman, CEO of Ateliere, a provider of software and services to entertainment companies. “This means that it doesn’t have to deal with the challenges faced by other competitors operating both digital and legacy businesses.”
It also has a several-year head start on its rivals which has turned its brand into a cultureal shorthand: “Wait for Netflix” is code for skipping buying a movie ticket, wherever the film actually ends up streaming.
When you can just cast Jennifer Lopez in an original action thriller and get sky-high viewership for “The Mother,” why would you want to mess around with questionable IP or try to turn a successful movie from decades ago into an ongoing franchise?
That also points toward less of a desire to spend $200 million on the next “The Grey Man” when “Purple Hearts” will pull comparative viewership at a fraction of the cost. Similar discipline was evident when Netflix pulled the plug on “Paris Paramount” and “Masters of the Universe.”
There’s also the phenomenon that a show that seems to flop on a smaller streaming service can thrive on Netflix. Is there any doubt that “Girls5Eva” will become a viewership hit once it migrates from Peacock to Netflix, just as “Cobra Kai,” “You” and “Lucifer” went from underseen to pop culture-defining hits once they debuted with a tudum?
Measured optimism amid the strikes
Wall Street didn’t exactly love the earnings news, sending the shares down 8% Thursday. But even with that drop, the stock was still up 48% since the beginning of the year, and most analysts struck a cheery tone as they issued reports following the fresh quarterly numbers.
“Netflix is ahead of peers with new revenue streams — advertising, ad-pay plans, and paid share members — and no one can compete with its technology platform, programming, and global distribution,” said CFRA Research research director Kenneth Leon.
Hollywood’s dual strikes are a question mark. But they appear to be strengthening Netflix’s cash flow by pushing some content spending into 2024. That gives Netflix more money to spend on shows at the exact moment that its rivals, most of which are still losing money on streaming, are contemplating licensing more of their libraries. Netflix’s larger audience all but guarantees that it can outbid others and still make money.
“Companies like Warner Bros Discovery are desperate for cash, and even more so now due to the strikes,” said Syracuse University professor J. Christopher Hamilton. Licensing shows like “Insecure,” “Band of Brothers,” “The Pacific,” “Six Feet Under” and “Ballers” is just a sign of the new streaming environment.
So does it matter if Netflix still can’t say what a Netflix show is? The streamer is currently in a position, thanks to its massive and engaged subscriber base, to turn almost anything into a viewership success. Its real competition isn’t other streamers as much as it is apps like TikTok or YouTube: It’s something you turn on when you want to watch anything.
Netflix didn’t respond to TheWrap’s request for comment.
